Airlines will soon face far stricter rules for issuing refunds, the Biden administration said Wednesday.
Meanwhile, the DOT will require airlines to more clearly disclose fees for ancillary charges like baggage and itinerary changes upfront.
It’s the latest set of new rules the Biden administration has imposed on airlines in the name of consumer protection.
Automatic refunds required (no more asking for one) The DOT will require airlines to issue automatic refunds to passengers when flights are canceled or when itineraries are significantly delayed or changed.
Refunds for add-on fees Airlines will also be required to issue refunds for ancillary fees paid when services aren’t received.
Airline bag fee refunds The rules include baggage: Airlines will be required to refund baggage fees when customers’ luggage is significantly delayed.
Those include: First and second checked bags Full-size carry-on bags Change and cancellation fees Airlines must display that pricing information “clearly, conspicuously, and accurately” the first time the fare and schedule information is provided.
Airlines respond Airlines argue they provide consumers with a wide range of ticket types, are already diligent about issuing refunds and offer transparency “from first search to touchdown.”
Refund policies for airlines will soon be subject to much stricter regulations, the Biden administration announced on Wednesday.
The White House amended the regulations to specify which lengthy delays or cancellations qualify travelers for reimbursements.
In seven to twenty days, depending on how they paid, qualified travelers must automatically receive refunds to their original payment method from the U.S. s. Department of Transportation declared in connection with a number of new rules.
In the interim, the DOT will mandate that airlines provide upfront, more transparent disclosures of all fees associated with ancillary services such as baggage and itinerary changes.
Stricter guidelines will also apply to them regarding incorrect Wi-Fi and late baggage refunds.
The Biden administration has recently enforced new regulations on airlines under the pretext of safeguarding consumers. According to the Department of Transportation (DOT), these regulations should save travelers roughly $500 million a year.
“Customers ought to be informed up front about the expenses they will incur and should automatically receive their money back from airlines that overcharge them,” U.S. S. Declaring the modifications, Transportation Secretary Pete Buttigieg said in a statement.
The DOT informs TPG that both of the new regulations will go into force by the end of October. It might take up to a year for travelers to notice certain provisions, though.
Here is what you should know about the new rules that the DOT has released.
Refund requests must be made automatically; please do not ask again.
When flights are canceled or when itineraries are significantly altered or delayed, the DOT will mandate that airlines automatically refund passengers. Remember that this will only come into play if the passenger decides in the end not to travel and refuses to accept a refund or other compensation.
In these circumstances, passengers are already required by DOT regulations to receive a refund for any portion of their itinerary that is unused. Regardless of the cause of the disruption, this is true. (It makes no difference if the cancellation is brought on by weather, maintenance, or another issue. ).
Still, a lot of travelers have discovered that they frequently need to request a refund. Usually, this entails making a request over the phone, via email, or online. The DOT is hoping that will stop.
The DOT said in a statement, “In the absence of this rule, consumers must navigate a patchwork of onerous procedures to request and receive a refund.”.
Related: Know your rights as an airline passenger in case of a travel emergency.
How quickly after a flight should you receive your refund?
As of right now, travelers who paid for their tickets with a credit card will have to wait seven days for their airline to automatically issue a refund; those who paid with another payment method will have to wait 20 days.
Vouchers, travel credits, or other types of compensation, such as frequent flyer miles, cannot be substituted by the airline without the passenger’s consent.
What, though, is a “significant change”?
The “significant change” provision mentioned above is one unclear aspect of the current federal regulations.
If a passenger declines to accept a rebooking, they also have the right to reimbursement for substantially altered or delayed flights.
Up to this point, the DOT has determined what precisely qualifies as a “significant” change on an individual basis.
The new regulation makes it clear:.
The departure or arrival of a domestic itinerary is delayed by three hours or more, including delays.
The departure or arrival of an international flight is delayed by six hours or more, including delays.
At least six hours were added to an itinerary.
Something changes about a traveler’s origin or destination.
an itinerary that ultimately results in the traveler making more connections than planned.
when a passenger is transferred to a less expensive class of service.
when the original itinerary changes and a disabled passenger is forced to pass through one or more connecting airports.
when one or more necessary accessibility features are unavailable because a disabled passenger’s flight schedule changes and they are unable to use the original aircraft.
Additionally, before providing customers with a travel credit, voucher, alternative flight, or other form of compensation, airlines must notify them that they are entitled to a refund.
situations when a refund is not owed to you.
Remind yourself that if you accept the airline’s offer to rebook on a later flight and your flight is delayed or canceled, you will not be eligible for a refund under these new rules.
In spring of last year, the Department of Transportation did make a proposal to reimburse customers for airline-controlled delays and cancellations, even in cases where the customer is given a rebooking option. Nevertheless, this plan, which would result in U. s. policy, which would be more in line with EU regulations, has not yet been finalized.
reimbursement for extra charges.
In addition, when services are not rendered, airlines will have to reimburse any ancillary fees paid. This holds true for “extras” like Wi-Fi and luggage.
This implies you ought to be eligible for a refund in the event that your Wi-Fi stops working.
refunds for airline bag fees.
One of the regulations relates to baggage: In the event that a customer’s luggage is significantly delayed, airlines will have to reimburse baggage fees.
This is applicable to luggage that is delayed by 12 hours or more for domestic flights and, depending on the duration of the itinerary, 15 or 30 hours or more for international flights.
charging up front.
A second regulation that the Biden administration unveiled on Wednesday requires airlines to be more explicit in their upfront disclosure of all ancillary fees.
Airlines and third-party sellers, such as online travel agencies, will have to disclose add-on costs if they are “critical to consumers’ purchase decisions,” according to DOT regulations. “.
Those consist of:.
Baggage inspected first and second.
Carry-on bags of the full size.
Fees for adjustments and cancellations.
The price information must be shown by airlines “clearly, conspicuously, and accurately” the first time the fare and schedule details are given.
This information must also be disclosed up front to third-party sellers, such as travel agencies and internet travel agencies, according to the DOT.
Due to recent court decisions, a number of significant hotel chains, including Marriott and Hyatt, have been forced to implement comparable changes over the past year.
Disclosement of seat preference.
Additionally, airlines will have to notify customers that even if they choose not to pay for a seat, they will still be assigned to one on the aircraft.
Airlines that want to allow customers to pay for a seat must inform them of the following new rule.
“Part of your fare includes seating. It is not necessary to buy a seat assignment in order to travel. When you travel, a seat will be offered to you at no extra cost if you choose to buy a ticket without choosing a seat beforehand. “.”.
When booking a ticket without the option to select a seat (usually in basic economy or on a budget airline), travelers will be assigned a seat at check-in or at some other time before boarding on many carriers.
When do these regulations go into effect?
It may take up to a year for customers to notice significant changes, as carriers have until late April 2025 to start displaying this information on booking channels.
According to the Department of Transportation (DOT), airline bag fee revenue increased by more than 30% between 2018 and 2022—far exceeding the pace of operating revenue growth. The DOT claims that these changes will end “bait-and-switch” tactics, which some airlines use to hide costs.
Airlines answer.
Airlines claim they give customers a variety of ticket options, are transparent “from first search to touchdown,” and are already prompt in issuing refunds. ****.
“You. S. Airlines for America, a trade association representing the biggest U.S. airlines, states that its members are dedicated to offering the best possible service, which includes transparency about costs, fees, and ticket conditions. s. stated in a statement provided to TPG on Wednesday.
The group observes that, after accounting for inflation, average domestic round-trip tickets plus ancillary fees are now less expensive than they were in 2010.
As per the organization, airlines frequently surpass the DOT guidelines, mentioning the biggest 11 U.S. s. Between May 2020, the peak of the pandemic shutdowns, and December 2023, carriers issued $43 billion in refunds.
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